But this is a notion financial services provider Ithala SOC Limited is trying to dispel. July is savings month and Sandile Xolo, the head of marketing and communications for Ithala, says this calls for all institutions to raise awareness about financial management and topics around key aspects of saving.
“Having access to money and financial freedom comes with the need to manage your finances and ensure that debt does not overburden or destroy your ability to create wealth.”
A 2019 report by the National Credit Regulator showed that of the 25 million credit-active consumers in South Africa, 10 million were behind on their loan repayments. The World Bank has deemed South Africa to be the most indebted country in the world.
A report compiled by Debt Rescue based on year-long research shows that only 23% of South Africans have money left at the end of the month. Most people battled because of debt repayments, with more than half of consumers using 75% of their salary to pay their debt.
Ithala believes over-indebted consumers must engage in some serious introspection and exercise strict financial discipline if they are to comfortably make ends meet.
Sandile Xolo, head of marketing and communications for Ithala. Picture: Facebook
While Xolo says reducing debt, saving, investing and ultimately enjoying financial freedom rests with each individual, access to the right information will result in more informed choices and an improved standard of living.
The organisation believes that educating people about money and providing the necessary tools to manage money can help to address the triple challenges of poverty, unemployment and inequality. Ithala regularly undertakes initiatives that help promote financial literacy in communities and encourage a spirit of saving.
“Often, what makes financial freedom unattainable and pushes most people into debt is the lack of financial literacy which leads to poor, consumption-driven decisions.”
Equipping people with key financial literacy skills as early as possible at school level can enable them to make sound future decisions regarding their money, he says.
To assist people to save and improve their wealth, in 2015 the National Treasury introduced tax-free savings accounts to be to the public by offered by banks, life insurance companies, collective investment scheme managers, Linked Investments Service Providers and authorised users.
Tax-free savings accounts are a way of encouraging more individual saving and investment. For the past 60 years, Ithala has been at the forefront of creating special offerings that will help people save as a means to accumulate personal wealth and economic freedom. “Investment is an important vehicle for financial freedom.
“Hence, much-needed guidance on financial planning, coupled with a savings culture, will yield positive returns for ordinary South Africans,” Xolo says, adding: “Our mission is to instil and promote the culture of savings and we urge our fellow South Africans to start their journey with Ithala.”
A distribution network of 38 branches in KZN provides convenient transacting facilities. Ithala offers a comprehensive portfolio of corporate and personal banking solutions. For more information visit www. myithala.co.za, call 031 366 2500 or follow Facebook @MyIthala, Twitter @MyIthala.